In an earlier post, we looked at the Ramsey litigation, which involved consideration of the complex legal tests that apply when determining whether a person who performs work for a company is an employee or contractor.

The employee (Tomlinson) was purportedly employed by one company (Tempus) and then “supplied” to another company (Ramsey).

The government regulatory agency for employment matters, the Fair Work Ombudsman, successfully claimed that Ramsey was the true employer and obtained orders from the Court that Ramsey pay redundancy benefits to Tomlinson and others.

Later, Tomlinson brought proceedings against Ramsey for damages for an injury suffered at work, but in those proceedings he alleged that the employer was Tempus and that Ramsey was liable as the owner of the premises that Tomlinson attended for work.

Ramsey had to put the claim in this form because he was outside the limitation period for claiming personal injury damages from Ramsey as his employer.

Ramsey sought the dismissal of the proceedings on the basis that there was an issue estoppel.  This was rejected at first instance, but upheld on appeal to the NSW Court of Appeal.

The matter was then appealed to Australia’s highest court – the High Court of Australia.

The accepted scope of the doctrine of  issue estoppel is that it prevents a party to litigation and any party claiming through it (a “privy”) from agitating in another set of proceedings an issue which was finally decided in the earlier litigation.   The main issue in the appeal was whether Tomlinson had such a relationship with the Fair Work Ombudsman in relation to the earlier litigation.

The Ombudsman sued Ramsey under provisions in the Fair Work Act which give the agency standing to bring proceedings for breach of the Act.  In these proceedings, the Court can order that compensation be paid to one or more employees affected by the proven breaches.  A different set of provisions in the legislation allows the Ombudsman to bring proceedings on behalf of one or more employees who have been the victim of breaches.  Those provisions were not used here.

Consequently, the legal action was not brought on behalf of Tomlinson.  Although he gave evidence for the Ombudsman, and ultimately benefitted from the proceedings, he was not a claimant in his own right nor was he claiming through the Ombudsman.

Because of these features of the case, the High Court concluded that there was no issue estoppel.  In doing so the High Court confirmed the relatively restricted scope of the doctrine and, in particular, the requirement that the interest of the privy must in each case be a legal interest – an economic or other interest in the outcome of the earlier proceeding is insufficient.